KPMG launches new climate reporting hub

A new climate reporting hub to provide insights and guidance for organisations and their stakeholders has been launched by KPMG. The ‘Clear on climate’ reporting hub is designed to clearly explain to investors and stakeholders the financial implications of climate-related matters.

“Climate change is driving broader stakeholder scrutiny of financial reporting, with regulators, investors and the public focusing on how companies report on climate-related matters – such as net-zero commitments. And they are demanding clarity about climate,” said KPMG.

The hub will cover key reporting issues that companies are facing through FAQs, podcasts and videos. KPMG said the resources will constantly grow and be regularly refreshed – for example, a whole new emissions section will be added soon.

“What’s described in the front of the annual report won’t always be mirrored in the financial statements in the way users expect. This is often true for climate. It is important that companies both comply with the IFRS Accounting Standards and connect the dots between financial and non-financial information,” said Larry Bradley, global head of audit, KPMG International.

KPMG explained that most, if not all, companies are facing risks arising from the physical effects of climate change and the transition to a lower-carbon economy. It said they should consider whether these matters are material to the financial statements and ensure users can understand the impact of climate. KPMG noted there is no single standard that addresses everything and there are a lot of bases to cover to get the accounting right, adding that the essential question for companies is: would an investor make a different decision if a piece of information were included?

Ultimately, investors and regulators want to see clarity and connectivity between a company’s financial and sustainability performance, said KPMG. It said one of the first jobs is for companies to address climate in their financial statements today and ensure they’re complying with the relevant requirements and are clear about the policies applied and judgements made.

Brian O’Donovan, global IFRS and corporate reporting leader, KPMG International, said: “Essentially, companies need to tell investors what the financial implications of their climate-related plans are, and if they believe there’s no financial impact, tell investors why. Investors are looking for a connected picture of performance, showing the financial implications of sustainability plans and actions.”